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A Disagreement With DF On Apple’s Approach To The Ringtone Racket.

Daring Fireball’s John Gruber had a lot to say in his article about ringtones and what he calls the “ringtones racket”. However, I disagree with part of his premise, and ultimately his conclusions. For other views on this subject here’s a great post from Epple, and Roughly Drafted touches on the subject as well.

I don’t necessarily disagree that it’s a “racket” in the sense that I’d say nearly all people agree that ringtones should be considered “fair use”. However, the article seems to believe they’re that way now, whereas I don’t believe the matter is settled at all — certainly not settled enough for Apple to act in the manner the article suggests. And that’s where I disagree the most: The call for some Herculean effort on Apple’s part that’s simply not realistic in the current environment. Gruber does not like Apple’s approach, I think it’s a start.The DF article concludes thusly:

“Faced with the choice between doing what’s right for customers or charging them money for something they shouldn’t need to pay for, Apple chose the latter. There is no middle ground. And any business that hinges on your customers “not knowing any better” is a bad business.”

Apple’s real choices were to offer nothing or something much better than what’s available now, and at a lower price. Apple negotiated this while Verizon and other carriers never even tried to. Apple took an approach that didn’t put an end to the ringtones “racket” altogether because they cannot do so. There are limits to what Apple can do with content that’s not theirs. Such things must be negotiated, and we’re talking about negotiations with companies whose heads are still in the 70’s and believe you should pay them every time you so much as hum a song.

I’m not sure why Gruber believes a better ringtone deal available today is somehow not “right for customers”. He believes it should be free or nothing, but there are alternatives. Apple is correct at this time to negotiate major changes that shake the status quo, even though they don’t reach the utopian plane DF (and others) believe should be the only next step.

The argument that Apple is now restricting non-iTunes songs is overreaching. All “MP3 players” let you rip and play your own CDs, but how many let you make ringtones from them? None. Asking Apple to do what would be flatly refused by the labels is not just living in Utopia, but running for mayor as well.

The fact that most people want a ringtone considered “fair use” doesn’t change the fact that currently the labels have, at the very least, the upper hand in this argument. They have years of precedent in sales of ringtones, as well as specific prohibition of using songs as ringtones in online music stores’ TOS, on their side.

How did it get this way? Easy, we were all asleep. Ringtones weren’t as much in demand years ago and we didn’t notice or care. For every person that might have balked when the first trickle of such ringtones were offered for sale, there were 50 people who bought ’em. It’s not so easy putting that cat back in the bag. Too bad. Sucks to be us. Now it’s gonna be harder to change.

Take the labels to court, or let their own failing business tactics eventually force them in the right direction; those are the only things likely to make them change. But given how slow they’re moving on DRM, and their own warped views on ringtones (see below), that’ll take a while. Gruber seems to think that in the meantime Apple should either do nothing, or launch an initiative of free ringtones they’d be forced to pull within 48 hours, tops.

To put Apple’s approach in perspective, let’s look at ringtones from Apple’s and the labels’ point of view to compare and contrast…Apple’s ringtone offering is radical compared to the options available before it:

Cost is ninety-nine cents, or $1.98 if you don’t own the iTunes song.

Make it yourself (up to 30 seconds, with optional fade in and fad out).

Initially half a million titles available.

Purchase online and receive immediately for synching to multiple iPhones.

Notice that both prices are less than ringtones available from service providers elsewhere, and in their case you don’t even get the song! What if, As Gruber suggests, you already own the song on CD? Apple charges $1.98 for the ringtone, which is still less than anybody else, you still get to make it yourself, and you can still use it on multiple iPhones. In other words, even the worst-case iTunes ringtone scenario is a better value for the consumer than anywhere else.

Now let’s look at what the labels apparently believe is a ringtone value: The “ringle.” I’ve already written about how stupid these are, and their announcement provides a perfect point of comparison to Apple’s approach:

Cost is six or seven bucks.

Somebody makes it for you.

Initially 60 to 70 titles available.

Available at retailers on a CD, so you get to drive there, stand in line, etc.

Bundled with a couple songs you don’t want (so they can charge six or seven bucks).

The above two scenarios are the reality of ringtones now (well, ringles are due this Fall). They’re legitimate and legal. Neither is free, and both charge for a ringtone of a song you ultimately own, yet look at the world of difference between them! Heck, the “ringle” can even make buying ringtones from current carriers look good. Who would have thought that possible? Sony and Universal combine to scrounge up maybe 70 titles? Seventy?! I’d say that makes Apple’s half-million look pretty damn good.

How can anyone look at these two approaches and not realize Apple just made a game-changing move? How short-sighted do you have to be to eye only an ultimate goal, and consider any progress short of that some sort of misstep? In my view, Apple’s patience in building itself back up these last 10 years has probably been its greatest strength.

There are other ways to get ringtones on an iPhone, but their legality is highly questionable and I won’t dwell on them. Apple makes half-hearted attempts to block them since it’s no doubt obligated by the labels to do so. You cannot be the #3 retailer of music and simply turn a blind eye to it, the labels would have your head on a platter. Apple has every incentive to just quit the whole thing.

Thankfully, Apple doesn’t live in Utopia, but rather the real world where they realize change is made (sometimes slowly) one positive step at a time. This is exactly how they built the iTunes store. Gruber certainly doesn’t have to follow in Apple’s footsteps, but he shouldn’t attempt to cover their tracks either.